- Title: Fed says U.S. economic recovery on track despite COVID-19 surge
- Date: 28th July 2021
- Summary: WASHINGTON, D.C., UNITED STATES (JULY 28, 2021) (UNRESTRICTED POOL) VARIOUS OF U.S. FEDERAL RESERVE CHAIRMAN, JEROME POWELL, APPROACHING MICROPHONE (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "Good afternoon at the Federal Reserve, we are strongly committed to achieving the monetary policy goals that Congress has given us: maximum employment and price stability. Today, the Federal Open Market Committee kept interest rates near zero and maintained our asset purchases. These measures, along with our strong guidance on interest rates and on our balance sheet, will ensure that monetary policy will continue to support the economy until the recovery is complete." WHITE FLASH (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "It's not.... it's not timely for us to be thinking about... about raising interest rates right now. What we're doing is we're... we're looking at our asset purchases and judging what is right for the economy and judging how we... how close we are to substantial further progress and then tapering after that." (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "So what would substantial further progress be? I'd say we have some ground to cover on the labor market side. I think where we're some way away from... from having had substantial further progress with... toward the maximum employment goal. I would want to see some strong job numbers. And that's kind of the idea." WHITE FLASH . (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "We feel like we're going to be making good progress over the next... the course of the next year, a couple of years, really, toward maximum employment. This is a very strong labor market. If you look at the number of job openings compared to the number of unemployed, it's... we're clearly on a path to a very strong labor market with high participation, low unemployment, high employment, wages moving up across the spectrum. That's the path that we're on. And it shouldn't take that long in macroeconomic time to get there." WHITE FLASH (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "This is now not so much about people going back to their old jobs, it's about finding a new job. So that's a time-intensive, labor-intensive process and there may be a bit of a speed limit on that. There's research that suggests that there is a speed limit on that. So it's not like you can have millions of people at the beginning of the recovery going back in a single month because they're just going back to their old job. This is about job selection, things like that. There may also be some factors that are that are holding people back. And that's... this is what surveys say. There are people who who are reluctant to go back to work because they still feel exposed to COVID-19. These could be jobs where there is a lot of interaction with the public and where perhaps there's a family member who's vulnerable or afraid for whatever reason. There's also caretakers who are where schools are not fully open and parents are at home or taking care of older people. And there's also been very generous unemployment benefits which are now rolling off. There will be fully rolled off in a couple of months. And all of those factors should wane. And, you know, we think we should see, because of that, we should see strong job creation moving forward." WHITE FLASH (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "Inflation is running well above our two percent objective and has been for a few months and is expected to run up certainly above our objective for a few months before, we believe it, It'll move back down toward our objective. The question whether we've met that objective formula is really one for the committee to make. I can't I can't do that by myself. But it's clear that this time inflation is actually running above two percent and again, has been and will be at least we expect it will in coming months before returning down toward our target." WHITE FLASH (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "What we've seen, though, is with successive waves of COVID-19 over the past year and some months now, there has tended to be less economic... less in the way of economic implications from each wave. And we will see whether that is the case with the Delta variety. But it's, you know, it's a... it's certainly a not an unreasonable expectation. So it certainly is plausible that people would pull back from some activities because of the risk of infection - dining out traveling schools might... some schools might not reopen - we may just... we may see economic effects from some of that or it might weigh on the return to the labor market. Some people might choose, again, we don't have a strong sense of how that might work out. So we'll just be monitoring it, monitoring it carefully." WHITE FLASH (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN, JEROME POWELL, SAYING: "As long as COVID-19 is running loose out there, as long as there's time and space for the development of new strains, no one's really, finally safe. These strains, there's no reason they just can't keep coming. And one, you know, one more powerful than the next. We don't know that. But that's certainly a plausible outcome. Now, as vaccinations rise, we can nonetheless get back to our economic activity. But, you know, it is both the right thing to do and and very much in our interest to make sure that vaccination happens broadly around the world just for that reason."
- Embargoed: 11th August 2021 21:08
- Keywords: Fed Chairman Jerome Powell Federal Reserve U.S. central bank U.S. economic growth interest rate two-day policy meeting
- Location: WASHINGTON, D.C., UNITED STATES
- City: WASHINGTON, D.C., UNITED STATES
- Country: USA
- Topics: Economic Events,Equities Markets,United States
- Reuters ID: LVA001ENRABLZ
- Aspect Ratio: 16:9
- Story Text: AUDIO QUALITY AS INCOMING
The U.S. economic recovery remains on track despite a rise in coronavirus infections, the Federal Reserve said on Wednesday (July 28) in a new policy statement that remained upbeat and flagged ongoing talks around the eventual withdrawal of monetary policy support.
In a news conference following the release of the statement, Fed Chair Jerome Powell said the U.S. job market still had "some ground to cover" before it would be time to pull back from the economic support the U.S. central bank put in place in the spring of 2020 to battle the coronavirus pandemic's economic shocks.
"I would want to see some strong job numbers" in coming months before reducing the $120 billion in monthly bond purchases the Fed continues to make, he told reporters.
But Powell also set aside, at least for now, the risk that the renewed spread of the coronavirus through its more infectious Delta variant would put the recovery at risk or throw the Fed off track as it plans an exit from crisis-era policies.
"It will have significant health consequences" in the areas of the country where outbreaks are intensifying, Powell said.
But in the prior waves of coronavirus infections "there has tended to be less in the way of economic implications ... It is not an unreasonable expectation" that would remain the case this time, he added.
The Fed's policy statement, issued after the end of a two-day policy meeting, reflected that confidence.
During a presser forlloing the statemen release, Powell said he was in the process of writing a speech to be delivered at the annual Jackson Hole conference of central bankers next month, but he declined to say what his remarks will focus on.
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